- What is a proposal letter?
- How do you write a proposal letter?
- 1. Talk about yourself first
- 2. Indicate the reason clearly
- 3. State the objective(s)
- 4. Provide your value proposition
- 5. Clearly explain the next steps
- 6. Add a call to action
- What is the format of a simple proposal letter?
- Key takeaways
A well-written proposal letter goes a long way in communicating your business ideas to the reader effectively. Our six tips can help you successfully reach your target audience and convince them to invest in your business. Learn more here and see an example for how to write an effective proposal letter.
In today’s business world, effective communication is important, especially if you have a lucrative business idea or innovative project to propose to key stakeholders. And this is where a well-drafted proposal letter comes in.
In this blog post, we’ll discuss:
The importance of a proposal letter
How to write a proposal letter
What is a proposal letter?
The primary purpose of a proposal letter is to introduce an important business idea or project to someone in a position to approve the idea. For example, if you’re running a small business and you wish to apply for funds to venture into a new market, you will need to write a proposal letter to convince the investors to invest in your business.
Proposal letters are often considered to be the first impression of your organization to an external party. A clear and well-written letter will likely denote professionalism on your part, and it could potentially convince the reader to make their decision in your favor.
Contrary to popular belief, there’s no cookie-cutter approach to writing a proposal letter. After all, the letter will depend on the target audience and the reason it is being written. A proposal letter to request funds will be different from a letter written in response to a tender notice.
How do you write a proposal letter?
Like all other business documents, a proposal letter has an intent and a value proposition. Here are six tips on writing an effective proposal letter:
1. Talk about yourself first
The first paragraph of your proposal letter is the most crucial one. It’s an opportunity for you to introduce yourself and make a positive impression on the reader. Provide some basic information about your organization and a brief overview of the topics you’re intending to cover in the letter. If you’ve had prior correspondence with the reader or the reader has a professional relationship with your business, mention it.
2. Indicate the reason clearly
The purpose of a proposal letter is just as important as the introduction. Communicate the reason you’re writing this letter—be it a request for funds or a willingness to address some of the problems the reader is experiencing. If your objective is to solve the recipient’s problem, show your understanding of the problem and how you’ve helped other organizations manage similar problems.
3. State the objective(s)
When you’re describing the short-term and long-term goals you intend to achieve, be very specific. Talk about how you can help the recipient and deliver tangible results for them. Whenever possible, use specific metrics and describe the positive outcomes you can deliver.
“With this loan, we can improve our production capacity by 45% by purchasing two new machines. The increase in output will help us meet the market demand for our products and allow us to improve our cash flows and repay the loan.”
4. Provide your value proposition
If you’re writing a proposal letter to request funds, let the recipient know what makes you qualified for this additional investment. What are some of the major strides you’ve made in the industry? How will you ensure the additional capital will be used in business operations and generate a positive ROI for the lender?
Similarly, if you’re writing a proposal letter to respond to a tender notice, discuss some of the major projects you’ve completed in the past and how your services set you apart from the others. What kind of guarantee do you offer on your work? What are some of the biggest clients you’ve worked with? How did you help your clients address some of the issues they faced?
5. Clearly explain the next steps
Whether you’re writing a proposal letter to request funds or to undertake a new project, cost is a major factor worth considering. The recipient will likely make the decision in your favor if you let them know how you will use the funds and ensure timely repayment or how you will complete the project.
If you’re applying for funds, you may need to disclose your financial statements to show your ability to repay the loan. Also, add details on how the additional funds will be used and how the loan will be repaid. Similarly, if you’re writing a letter in response to a tender notice, include a statement of work and estimates of resources and cost of the project.
6. Add a call to action
In the context of proposal letters, a call to action (CTA) denotes urgency and provides the recipient with clear instruction on what to do next. Having a CTA can increase the likelihood of the recipient responding to your proposal letter.
A call to action also indicates your intention to follow-up with the recipient, showing that you’re serious about the proposal. Let the reader know about the specific date and time you will touch base with them again. Finally, thank the recipient for their time and consideration. It’s always best to end on a positive note.
What is the format of a simple proposal letter?
Proposal letters are written for a wide variety of reasons. Here’s a sample proposal letter to give you an idea on how to write one:
[Your full name] [Your company’s name and address] [Date]
[Recipient's full name] [Recipient’s company name and address]
[Salutation]
I have been in the construction business for over 15 years and have completed several housing projects for the City of Chicago. I graduated from the University of North Carolina with a degree in Civil Engineering and worked with ABC Construction Ltd. for five years before starting my own company. Throughout my professional career, I have acquired the necessary experience, business relationships, and connections to grow my business to serve the Greater Chicago Metropolitan Area.
After successfully completing multiple housing and commercial construction projects in the city, I wish to expand my business operations and set up new offices in Naperville and Aurora. The following proposal will show you my business expansion plans and how I plan to use the additional funds to complement my existing capital.
Sincerely, [Your name]
Company profile - [insert your company’s mission, vision, and values and how you made a difference in your community]
Loan request - [include details on the amount you’re requesting and repayment terms.
Financial statements - [include excerpts from your financial statements that showcase your business’s ability to repay the loan]
A well-written proposal letter can open up many opportunities. If you need help exploring options and planning your professional journey, check out our Career Pathways tool.
Key takeaways
Proposal letters are generally written to convey business ideas to key decision-makers.
A well-written proposal letter could lead to a decision in your favor.
Before writing a proposal letter, make sure you’re clear on the intent of the document.
